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Reining in Wall Street Updates

The 4th in a series of reports by PIRGIM Education Fund that analyze the CFPB's consumer complaints database. The reports have found which financial institutions have caused the most problems for consumers, which have responded best to consumer complaints, and how the CFPB has provided consumers with an avenue to get real results.

For years leading up to the 2008 financial collapse, federal bank regulators ignored numerous warnings of increasingly predatory mortgage practices, credit card tricks and unfair overdraft policies used by banks. The banks were earning billions from “gotcha” practices. Incredibly, bank regulators actively encouraged this behavior, arguing it was profitable and kept banks safe. No regulator cared about its other (and, to them, secondary) job: enforcing consumer laws.

The Senate banking committee voted along party lines Monday to transform the regulation of financial markets, sending another piece of far-reaching legislation to the full Senate a day after Congress approved an overhaul of the nation's health system.

Following the collapse of major financial institutions Congress enacted a sweeping $700 billion taxpayer-financed bailout of the financial sector. However, months into the program and billions of dollars later, no one knows how the money was spent and no one is convinced that it’s achieved any of the intended results.

Even after the financial crisis, lobbyists for the big banks and credit card companies furiously opposed pro-consumer provisions in the Wall Street reform law. We helped convince Congress to ignore them and create a Consumer Financial Protection Bureau.